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US stocks tumbled, extending the biggest weekly drop of the year for the Standard & Poor's 500 Index, after data showed the nation added less than half the number of jobs economists forecast in March.
Bank of America Corp. and Citigroup Inc fell more than 1.6 per cent as financial shares slumped. Caterpillar Inc. and General Electric Co slid at least 1.1 per cent to pace declines among the largest companies. F5 Networks Inc tumbled 19 per cent after lowering its revenue forecast. Cisco Systems Inc and Juniper Networks Inc, the makers of communications equipment, lost more than 3.6 per cent.
The S&P 500 retreated 1.1 per cent to 1,542.2 at 9:43 am in New York. The equity benchmark gained 0.4 per cent yesterday as Japan's central bank increased its stimulus program. It is down 1.7 per cent for the week. The Dow Jones Industrial Average fell 140.39 points, or 1 per cent, to 14,465.72 today. Trading among S&P 500 shares was 27 per cent above the 30-day average at this time of day.
"This report is a huge disappointment," Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $55 billion, said in a telephone interview. "This will spook the market and it obviously means that the Fed will remain on vigil with regards to the highly accommodative monetary policy."
Payrolls grew by 88,000 workers last month, the smallest in nine months, after a revised 268,000 gain in February that was higher than first estimated, Labor Department figures showed today in Washington. The median forecast of 87 economists surveyed by Bloomberg projected an advance of 190,000. The jobless rate fell to 7.6 percent from 7.7 per cent.
'Good day'
"The number is disappointing and moderately concerning, but one month does not make a trend,'' David Roda, the Miami-based regional chief investment officer for Wells Fargo Private Bank, said.
His firm manages $170 billion. "Yes, it's a miss and it's worth focusing on but we don't think it changes our forecast for a modest improvement in employment this year. It's a good day to buy stocks because it made the markets nervous."
The bull market in US equities entered its fifth year last month. The S&P 500 has surged 128 per cent from a 12-year low in 2009 as companies reported better-than-estimated earnings and the Federal Reserve embarked on three rounds of bond purchases to stimulate the economy. The S&P 500 and the Dow closed at record highs on April 2.
Alcoa Inc. unofficially kicks off the first-quarter earnings season on April 8 when it reports its financial results after equity markets close.
Earnings season
Earnings at S&P 500 companies decreased 1.9 per cent in the first three months of the year, according to analyst estimates compiled by Bloomberg. That would mark the first year-over-year decrease in profit since 2009. Energy company earnings fell the most with a drop of 6.6 percent, the estimates show, as oil traded at at an average of $94.36 a barrel during the period compared with $103.03 in the first quarter of 2012. Profit at technology companies declined 4.1 percent for the second-biggest drop, the data show.
All 10 groups in the S&P 500 fell, with technology, consumer-discretionary and financial shares losing at least 1.3 percent. Among the largest companies, Caterpillar declined 1.3 percent to $83.51 and GE tumbled 1.1 percent to $22.83. Bank of America lost 1.6 percent to $11.75, while Citigroup dropped 1.9 percent to $41.96.
Volatility Index
The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against losses, jumped 11 percent to 15.37 today. The gauge, known as the VIX, is down 15 percent for the year.
Cisco, the world's largest maker of networking equipment, declined 3.6 percent to $20.28 and Juniper Networks, the second- biggest, slid 6.7 percent to $16.90.
Rigel Pharmaceuticals Inc., a drugmaker with no products on the market, plunged 33 percent to $5.03 after its experimental rheumatoid arthritis medicine being developed with AstraZeneca Plc showed mixed results in a trial.
Hanesbrands Inc. rose 1.6 percent to $45.85 after the apparel maker said it will pay a quarterly dividend of 20 cents a share in June, the first time it has made a payout to shareholders.
NII Holdings Inc., which offers mobile-phone service under the Nextel brand in Latin America, rose 9.3 percent to $4.96 after agreeing to sell its Peru unit for $400 million.
